December i. 1907.] 



THE INDIA RUBBER WORLD 



95 



Review of the Crude Rubber Market. 



A'l tlii- writing fine new Islands Para at New York is 

 (incited at aliont 73 cents per pound — a lower price than 

 has l)cen mentioned in these pages for five years past. 

 Prices for this grade for some time have flnctnated as follows: 



Low. High. 



In lyoj... 83® 84 Feb. r; lO/Ca 108 Oct. I, 



In 1904... go® 91 Jan. 1; I2}(ni26 Dec. i. 



In 1905. .. iJ4f?( 115 Jan. i; J32(y'i33 June i. 



In 1906. . . iiSCa'i 19 July i; i2^(a:i2S Apr. i. 



In 1907... 72CW 73 Dec. i; ii8@ii9 Jan. i 



Now that rubber prices seem to have reached .1 lower level 

 that may be maintained for a considerable time, the opinion ex- 

 pressed in the American trade is that (l) rubber was too high 

 before, (2) manufacturers are carrying considerably larger stocks, 

 and (3) the financial stringency is having an effect on this, as 

 on every other branch of trade. The fact that large cargoes of 

 ruljber continue to arrive, without increasing the stocks visible. 

 while it is certain that consumption just now is reduced, is proof 

 to leaders in the trade that manufacturers are putting in store a 

 good deal of rubber bought "to arrive," probably at prices con- 

 siderably higher than the present market. When rubber, some 

 time ago, declined to about $1.20 there were manufacturers who 

 felt that the low water mark had been reached, and they ordered 

 freely. The same manufacturers will not buy to-day at any 

 price, on account of their supplies in store, and because they do 

 not care to tie up more capital in raw material. It is pointed out 

 that some of the smaller consumers are profiting by the present 

 situation. Not buying largely, or very far ahead, they are able 

 to secure rubber to-day, for current needs, at a price very far 

 Ijelow the cost of the rubber which most of the larger concern^ 

 are using. 



It is pointed oul that when the automobile industry became 

 firmly established here, with the accompanying demand for tires, 

 some of the rubber firms made up large supplies of tires, many 

 of which are yet on hand, in branch houses for instance, in order 

 to be ready for any demand that might occur. A great deal of 

 rubber thus went into consumption in a way in which rubber 

 has not since been called for, and this is given as one of the 

 reasons why the consumption of rubber, in America at least, had 

 declined, even before the late financial trouble, which has lessened 

 activity in the production of all lines of goods. Other branches 

 of the trade are mentioned, in which stocks of manufactured 

 goods have been piling up, as well as stores of raw materials, 

 all pointing to conditions of a reduced call for crude rubber, now 

 that financial conditions are not favorable to the production of 

 any goods not in actual current demand. The free buying of 

 rubber, due to the conditions above named, led for awhile to a 

 rise in the price of the material to figures now regarded in the 

 trade as abnormal. 



Another element in the price situation is the recent enlarged 

 production. While it remains true that rubber production else- 

 where means the exhaustion of the resources, and while it is 

 none the less true that rubber production from the Hcvca species, 

 in the Amazon region, is handicapped in many ways, the natural 

 supplies of Hcvca rubber are very great, and the amount gathered 

 of late has shown an important rate of increase, to wMt : 



Year ending June 30, 1903 Tons 29,850 



Year ending June 30, 1904 30,580 



^'ear ending June 30. 1905 33.060 



Year ending June 30, 1906 34,490 



Year ending June 30, 1907 ,38,005 



During the first part of the period here reviewed the yearly 

 increase in the Para rubber output was taken up by the industry, 

 either in the manufacture of goods or for increasing factory 

 stores. The heavy increase of 10 per cent, in production last 



year, however, has resulted in an unusual surplus of rubber, 

 which is reflected in lower prices. There is to be considered also 

 the new- source of "Para rubber," the plantations in the Far East. 

 The 500 or more tons shipped from Ceylon and the Malay States 

 in 1906 — and the rate of output is larger this year — do not cover 

 all the production from plantations, in actual weight. Further, 

 the trade counts a ton of plantation Para as equal to more than 

 a ton of ordinary Para, owing to the lower shrinkage. That is. 

 500 tons from Ceylon and Malaya would be equivalent, according 

 to some estimates, to 600 tons of rubber from the Amazon. There 

 is to be mentioned, finally, the new rubber from Mexico — guayule 

 —the production of which lately has been estimated at 1,000,000 

 pounds a month. 



To sum up, wc have more rubber from the Amazon, the new 

 plantation rubber, and guayule rubber, all coming at a time when 

 the aggregate demand is less pressing, following all of which the 

 reorganization of the financial system — what the so-called "panic" 

 really amoimts to — has tended to check consumption of com- 

 modities of every kind. Hence, lower prices, certainly for some 

 months to come. 



Of course any increase in demand for rubber would tend at 

 once to put up prices. To-day, as has been explained, American 

 manufacturers have little reason to buy, besides which the end of 

 the year is approaching, when factories usually wish to reduce 

 stocks rather than add to them. Increased buying is bound to 

 come, however, and the cpicstion is what new price level may be 

 looker for. Fine new Islands Para rubber has been over $1 since 

 the beginning of 1904, though before that date it had seldom 

 reached that figure, and had never long remained above it. Going 

 Iiack twenty years, in fact, rubber of this grade was never 

 quoted in New York at over this figure except during parts of 

 1898, 1899, and 1900, until 1904, as above stated, since which 

 time new conditions liave seemed to point to a permanently 

 higher level. While it isnever safe to predict w-hat rubber prices 

 will be, rubber manufacturers probably will not base their plans 

 for future business upon a basis of rubber at less than $1. 



Some African grades continue to be quoted at prices relatively 

 higher than Paras, but this is on account of limited supplies of 

 these sorts, and the fact that a few manufacturers insist upon 

 having particular grades of .Africans for certain compounds, pre- 

 ferring to pay any price which may be necessary to secure them 

 to changing their formulas. This condition cannot be expected 

 to last indefinitely, however, and already the tendency is toward 

 a decline in .\fricans to correspond w-ith what has taken place 

 in Para sorts. Recent sales at Antwerp have included less rub- 

 ber than usual for .American account, and the feeling prevails 

 in the trade that a good deal of Congo rubber is accumulating 

 in the hands of dealers rather than going into consumption. 



Despite the amount of cultivated Para rubber reaching New- 

 York, this new grade can hardly be said to have "found itself" 

 in this market. It ranks as "Para," of course, but not as equal 

 to Amazonian rubber, the superior price paid being due solely 

 to the small degree of shrinkage of the Ceylon product. The 

 feeling exists, however, that better rubber w'ill be coming for- 

 ward from the Far East as the cultivated trees become more 

 mature, and the trade already is beginning to watch w-ith interest 

 the various plantation marks, with a view to determining the 

 relative merits of the different lots coming to market. 



Reports from Mexico are to the effect that there has been a 

 decline in the activity of guayule rubber production, presutnably 

 due to the conditions of financial stringency in the United States. 

 Some of the mills are said to be storing their products, with a 

 view to awaiting a better demand. Shipments of guayide rub- 

 ber to Europe have been more active of late than to the States, 



